Canadian Foreign Policy and the Seven Power Summits

Timothy Heeney

Country Study Number One
Centre for International Studies
University of Toronto
May 1988

The major change since the Bonn summit was the role the new
US Secretary of the Treasury James Baker had taken in promoting
international economic policy coordination through the use of the
G-5. The Plaza Accord of September 1985 engineered a fall in the
value of the US dollar. This process was reaffirmed at a
subsequent meeting of the G-5 in January 1986. Baker, wanted to
extend coordination through the G-5, and the newly created
G-7 (see below) beyond just exchange rates. This signified a
major change in approach of the USA to international economic
policymaking.(113 )This
coordinated effort would continue to take place at the finance
minister level, however. This was a further indication of the
fundamentally 'non-economic' nature of the summit seven
leaders in the second generation of Seven Power Summits. At
Tokyo, there were no new leaders, except Chirac from France (due
to cohabitation). The economic situation continued
to be positive. This allowed the leaders to focus on the 'hot'
political issues of terrorism and the Chernobyl nuclear disaster.
There had been many high profile terrorist incidents since
Bonn, some of Welch had prompted the US bombing raid of Libya in
April 1986. The Chernobyl accident had occurred only one week
prior to the Tokyo summit.

After long hours of negotiation the summiteers reached an
accord which called for concrete measures to improve cooperation
in fighting terrorism. The economic discussions at
the leaders level were relatively brief and focussed on
endorsements of the work of the G-5 and the problems of
agricultural trade. This was the first time agricultural trade
had been an official topic and mentioned in the
communiqué. Although no specific decisions
were made, agriculture would be firmly established as part of the
new GATT round (for which no date was yet set) and as an enduring
subject on the summit agenda. Generally, this was a summit which
endorsed the work of other institutions and focussed on immediate
political topics.

The Mulroney government was under severe domestic pressure
during the spring of 1986 due to the Sinclair Stevens affair and
assorted other scandals. When Mulroney arrived
at Tokyo he was obviously intending to use the summit to boost
his popularity at home as he strolled around the airport putting
his arm around other leaders while they frowned
disapprovingly.(114)

The most important aspect of the Tokyo summit was its
admittance to a new "son of summits' - the G-7 group of finance
ministers. As more and more of the real economic policy
coordination was taking place at the finance minister
level, primarily under Baker's leadership, Canada's entry into
this select group was extremely important. Some have said
that Canada was not a driving force behind the creation of the
G-7 at Tokyo, and that Italy did most of the work.(115) While it may be true that our
representatives did not take their lobbying efforts to the media
or threaten to withdraw from the summit if not included, as Italy
did, the close personal relationship between Canadian
finance minister Michael Wilson and James Baker was essential to
the creation of the G-7 in 1986.(116
)
The Italian finance minister, Giovanni Goria, was
seen by other summit participants as a "clown", but Wilson's more
balanced approach Welch recognized that the G-5 would continue to
exist was appreciated to a greater extent at the
summit.(117) In fact the G-5 does
still
exist, but it was agreed at Tokyo that the G-5 would invite
Canada and Italy whenever "the management or the
improvement of the international monetary system and related
economic policy measures were discussed'' (118).

The creation of the G-7 was resisted by Britain and France
not because they had anything in particular against Canada or
Italy, but because they genuinely feared that this
would cause the development of an unofficial G-3 (the USA,
Germany, and Japan) which would leave them out of the apex of
international economic decision-making.(119) In retrospect, although the G-5
continued to meet periodically it has not made any attempt to
exclude Canada or Italy from any important decisions. The trend
has been toward a phasing out of the G-5, although it is often
difficult to tell who exactly is secretly meeting who at any
time.

Another issue which the Canadian government has claimed it
took the lead on at Tokyo was agricultural trade.(120) Mulroney claimed that "we
decided it was important to raise agriculture ... for the first
time as a group"(121) but did not
mention
that it was as much a British and American initiative as
Canadian. There were no solutions reached to the problems of
agricultural subsidies, but Canada, the USA, and Britain did
press hard enough to insert the general objective of including
negotiations on agriculture in the upcoming GATT round that
was to be launched in September 1986.